U.S. tariffs totaling 50% on a wide range of Indian goods took effect, combining an initial 25% tariff with an additional 25% tied to India's Russian oil purchases. The Indian government estimates the duties will affect $48.2 billion in exports and could render U.S.-bound shipments commercially unviable, triggering job losses and slower economic growth. Labor-intensive sectors including textiles, gems and jewelry, leather goods, food and automobiles face the sharpest impact. Some exemptions cover pharmaceuticals and electronic goods. The measures threaten established Indian presence in U.S. markets, risk unemployment in export hubs, and could slow the country's rapid economic expansion.
Steep U.S. tariffs on a range of Indian products took effect Wednesday, threatening a steep blow to India's overseas trade in its largest export market. President Donald Trump had initially announced a 25% tariff on Indian goods. But earlier this month he signed an executive order imposing an additional 25% tariff due to India's purchases of Russian oil, bringing the combined tariffs imposed by the U.S. on its ally to 50%.
The Indian government estimates the tariffs will impact $48.2 billion worth of exports. Officials have warned the new duties could make shipments to the U.S. commercially unviable, triggering job losses and slower economic growth. India-U.S. trade relations have expanded in recent years but remain vulnerable to disputes over market access and domestic political pressures. India is one of the fastest-growing major global economies and it may face a slowdown as a result.
Estimates by New Delhi-based think tank Global Trade Research Initiative suggest labor-intensive sectors such as textiles, gems and jewelry, leather goods, food and automobiles will be hit hardest. "The new tariff regime is a strategic shock that threatens to wipe out India's long-established presence in the U.S., causing unemployment in export-driven hubs and weakening its role in the industrial value chain," said Ajay Srivastava, the think tank's founder and a former Indian trade official.
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